Maaco

Maaco revamped its brand and refocused its development strategy over the past five years to continue to be the leader in the $43 billion automotive paint and collision industry. “We are an iconic brand that has been recalibrated and retooled,” Vice President of Franchise Sales and Development Rob Cambruzzi says. “The days of using Yellow Pages for advertising are gone … we are a data-driven, highly sophisticated business.”

In 1972, Tony Martino founded the first Maaco center in Wilmington, Del. Within five years, more than 200 centers had popped up throughout the United States and Canada. In 1981, the iconic catchphrase, “Uh-Oh, Better Get Maaco,” was developed and the company grew to 325 centers over the next year. Through its growth, Maaco developed a reputation for quality auto body repair and painting.

“Our Maaco certified centers are the best of the best,” Cambruzzi says. “These centers are distinguished for their quality of work in both auto painting and body repairs. Every year, through a comprehensive review of their business and repair services, certified centers have to pass a rigorous certification process .”

Today, Maaco franchisees operate nearly 500 locations and enjoy more than 45 percent marketshare in automotive cosmetic paint. “We really have zero competition in terms of franchises that operate in our industry,” Cambruzzi says. “The rest of the market is independent shops that are being hurt by consolidation efforts in the insurance world. We are operating five days a week, and our shops report an average of about $1.1 million1 in annual gross sales with an average annual income over $184,0001 to the bottom line. There is no competition that operates 8 a.m. to 5 p.m., generating those types of numbers.” (Please see item 19 of the Maaco FDD for further details.)

Upgraded Model

Maaco upgraded from a software-based to web-based operating platform that syncs with their locally installed system, OneMaaco. The system is fully integrated and helps franchisees become more streamlined. “Instead of minimal reporting and integration, OneMaaco is integrated into QuickBooks, KPI reports and online scheduling,” Cambruzzi explains.

The online scheduling function is connected to the Maaco mobile app for easy communication between stores and their customers. Along with scheduling service, the app also allows customers to do a mock-up estimate, submit repair requests to the local facility and watch the work being completed. “The auto body paint and repair process is an assembly line that moves from one stage to the next,” Cambruzzi says. “With our system inside the shop, we can move your car through our process, take a photo of the car and show you what is occurring with your vehicle at each step.”

From the Maaco app, a customer can also post photos of their car and its status on Twitter and Facebook. “We are leveraging social media and real-time updates,” Cambruzzi says. “Accessibility is one of the biggest ways we’ve changed.”

Accessibility comes not only in the form of technology, but also in location. “Most people think of a body shop as this dirty, dark, dusty place that they don’t want to go to,” Cambruzzi says. “Our satellite locations are small offices that are next to a grocery store or in a strip mall that people frequent quite often. Franchisees don’t have to worry about zoning and can feed vehicles from the satellite center to their production center easily. This equates to more sales for the franchisee.”

The first satellite location opened in July of 2013 and already Maaco has 25 units open today. “It’s all owned by franchisees; we have no company owned locations,” Cambruzzi explains.

Better Business

Because of the technology and business model advancements Maaco has made, the company is extremely attractive to prospective franchisees. “It’s a fantastic brand that is nationally recognized, with a solid platform,” Cambruzzi notes. “We are making the business grow using the tools that are available today.”

Starting a Maaco franchise is 100 percent turnkey. The company’s in-house real estate and acquisition team helps select a location using mapping software to understand the demographics of each market. From the moment a lease is signed until the doors are open, a dedicated Project Coordinator coordinates equipment and signage and is available to assist each franchisee with all of their location’s pre-opening needs. Before opening, three-weeks of training at Maaco headquarters in Charlotte, N.C., is required for new franchisees. Once the store opens, a member of the training team works alongside the owner for several weeks to ensure everything goes smoothly.

“Our franchisees come from all backgrounds,” Cambruzzi says. “Some of our most successful franchisees have no previous automotive experience. It’s a really simple business model. There are five stages to the assembly line, with a car being finished every hour.”

The company has diversified its services in the midst of its rebranding. Maaco leverages the size of its operation to grow Maaco Fleet, a division of the company that services fleet vehicles. “We have the quickest turnaround time in the industry,” Cambruzzi says. “Maaco works with a number of leading fleet providers. For example, we painted the U.S. Postal Service mailboxes you see on street corners the same color blue. We are pushing $100 million in fleet work to our franchisees and are growing that fleet sector by 30 to 40 percent each year.”

Maaco plans to double its number of locations over the next two to three years through acquisitions, attracting new franchisees, and working with existing franchisees to open additional locations. “There are over 30,000 body shops in the industry and over 95 percent are independently owned,” Cambruzzi explains. “These independent shops are being squeezed or losing accounts to insurance consolidators, so they need to sell or find another way to do business. Maaco provides two options. We offer to buy their facility or for them to franchise with Maaco, leverage our model and run their location.”

Maaco has grown significantly through the acquisition of independent shops and is able to quickly transform these locations into Maaco franchises. Historically, Maaco gained 20 shops per year, but this year that number is more than doubling, due to the company’s revised growth and acquisition strategy. “We have seen a tremendous amount of people very interested in this model because of the executives and the direction the business has taken,” Cambruzzi says. “It’s a simple matter of, do you have $300,000 in net worth, $140,000 in liquidity and a good credit score? If you meet those requirements then we want to talk to you.”